Zara store owner sees solid profit growth in H1

The interior of Zara on Belfast’s Donegall Place

The interior of Zara on Belfast’s Donegall Place

Inditex, the world's biggest clothing retailer and owner of the Zara brand, posted a 9% rise in first-half profit but gross margin as a percentage of sales slipped from the same time past year due to the stronger euro.

For the first half, net profit amounted to 1.37 billion euros, an year-on-year growth of 9 percent.

Sales at constant currency terms increased by 12% in the first seven weeks of the second half, beating expectations.

The company also continued to generate jobs at a healthy pace, having created 11,043 new positions in the last 12 months.

But gross margin fell slightly to 56.4 per cent from 56.8 per cent previous year, due to the strong position of the Euro as well as increased clearance offers.

Among 3 analysts covering Inditex (OTC:IDEXY), 1 have Buy rating, 0 Sell and 2 Hold.

Inditex's results are sensitive to fluctuations in the euro.

Inditex is notable for its fast fashion capabilities, keeping most of its production in Europe to respond quickly to trends.

Inditex´s chairman and CEO, Pablo Isla, said that the "strength and sustainability of the company´s integrated offline-online store model, which year after year continues to demonstrate its ability to deliver growth, while emphasising the creation of value for society and the environment, as evidenced by the notable creation of jobs, particularly in Spain, thanks to the headquarters effect".

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